Traders turn to commodities as stocks falter

Stocks and government bonds fell yesterday as commodities rallied to two-year highs.

Silver, soybeans and copper jumped to levels last seen in October 2008 as investors moved money into hard assets in anticipation that a massive economic stimulus plan announced by the Federal Reserve last week will continue to weaken the dollar.

Gold settled at $1,409.80 an ounce, up $7. The precious metal is hovering near record levels in dollar terms but is still well below its peak in the early 1980s after accounting for inflation.

Investors are expecting that commodities will hold their value even if the dollar falls.

The Dow Jones industrial average fell 60.09 points, or 0.5 percent, to 11,346.75. The Standard & Poor's 500 index fell 9.85, or 0.8 percent, to 1,213.40, while the technology-focused Nasdaq composite index fell 17.07, or 0.7 percent, to 2,562.98.- AP